Section 415 of the California Corporations Code provides that nothing in the General Corporation Law "shall be construed as a derogation of any rights or remedies of a creditor or shareholder may have against any … shareholder, director, officer or the corporation because of participation in any fraud or illegality practiced upon such … shareholder in connection with the issue or sale of shares …". Section 1312(a), however, expressly limits the rights of shareholders who have dissenters' rights to attack, set aside or rescind a merger or reorganization. Does Section 415 render Section 1312(a) a nullity?
That was the argument advanced in Steinberg v. Amplica, 42 Cal. 3d 1198 (1986). The California Supreme Court, however, disagreed, finding that "it proves too much". Instead, it held that "section 415 was not intended by the Legislature to apply the remedies of a minority shareholder in connection with a merger and that the appraisal statutes, including Section 1312(a), govern those rights".